Fidelity Raises Renk Stake Above 4% as Defence Orders Decouple from Stock Performance

Renk shares languish 46% below peak despite Fidelity's 5% stake and record €6.9B backlog. Q1 orders hit record. Technical pressure persists. Upcoming conferences and half-year results may provide catalysts.

The Augsburg-based gearbox specialist Renk is navigating a curious disconnect. While the company’s order books bulge and one of the world’s largest asset managers has quietly boosted its position, the share price remains stuck in a deep technical rut. FMR LLC, the US parent of Fidelity, now directly holds 4.19 percent of Renk’s shares, according to a voting rights disclosure. Including indirect holdings, the Fidelity group controls nearly five percent of the voting rights. Market participants view the move as a confident bet on the group’s long-term defence strategy.

That confidence is hard to square with the stock’s recent trajectory. Renk shares closed Friday at €47.95, a modest weekly gain of almost six percent, yet the bigger picture is stark. From the all-time high of €88.73, the price has shed nearly 46 percent. The shares trade below both the 50-day moving average of €50.74 and the 200-day average of €57.74, a gap that underscores the prevailing selling pressure. Since the start of the year, the stock has lost roughly 13 percent.

The operational story, however, tells a different tale. In the first quarter, Renk posted a record order intake of €582.3 million, with revenue climbing to €283.6 million. The adjusted operating margin improved to 15 percent, driven by the Vehicle Mobility Solutions segment. That division saw orders jump more than 20 percent and revenue rise 11 percent, while its operating profit reached €35 million.

Looking further ahead, the company sits on an order backlog of roughly €6.9 billion, enough to cover more than four years of expected revenue. Management has guided for full-year sales above €1.5 billion and adjusted operating earnings of up to €285 million. Berenberg analyst George McWhirter, who reiterated a €72 price target, bases his bullish view on recent developments at the Eurosatory defence fair in Paris. Renk not only showcased its traditional track drives but also pushed into the wheeled-armoured-vehicle market with a new gearbox. A cooperation with Finnish partner Patria to develop drive architectures for unmanned ground vehicles adds further growth optionality.

The management team is now on the road to sell that story. Monday sees them present at an investor conference in London, followed by a separate appearance in Baden-Baden on Wednesday. The next hard data point comes on July 16, when executives hold a preliminary analyst call. The full half-year results are scheduled for release on August 6, and the burden of proof will be on management to confirm that the strong momentum from spring is sustainable. Until then, the record backlog and the annual forecast provide the main support for a stock that has yet to convince the market it can shake off its technical malaise.